Topix Falls to Cap Biggest Monthly Drop Since May 2012

Japan’s Topix index fell as the yen
strengthened against the dollar, with the equity gauge capping
its largest monthly decline since May 2012.

Toyota Motor Corp., the world’s biggest carmaker, retreated
1.3 percent after the yen rose. Toshiba Corp. sank 7.5 percent,
the most on the Nikkei 225 Stock Average, after third-quarter
profit for the maker of products from nuclear reactors to flash-memory chips missed analyst estimates. Fujitsu Ltd. surged 13
percent to a three-year high as earnings at the computer-equipment manufacturer beat expectations.

The Topix index slid 0.3 percent to 1,220.64 at the close
in Tokyo. The measure dropped 3.5 percent this week and 6.3
percent for the month as weak economic data from China and a
sell-off of emerging-market currencies sparked a global equities
rout. The Nikkei 225 lost 0.6 percent today to 14,914.53. The
yen gained 0.3 percent to 102.46 per dollar, poised for its
steepest monthly rise since April 2012.

“It’s hard to tell just how far the chaos from the
emerging-market currencies will spread globally,” said
Yoshihisa Okamoto, the Tokyo-based head of equity research at
Mizuho Asset Management Co. “In the FOMC statement, the Fed
didn’t suggest there’s concern about emerging markets, and
that’s causing unease among investors.”

The Federal Open Market Committee this week left unchanged
its statement that it will probably hold its target interest
rate near zero “well past the time” that unemployment falls
below 6.5 percent, “especially if projected inflation” remains
below the committee’s longer-run goal of 2 percent. The U.S.
central bank said it will cut monthly bond purchases by a
further $10 billion to $65 billion.

Earnings Season

More than 600 companies on the Topix report earningsnext
week, according to data compiled by Bloomberg. Of the 94
companies listed in the gauge that have posted quarterly results
since Jan. 1 and for which Bloomberg has estimates, 59 percent
beat analysts’ projections for profit, according to data
compiled by Bloomberg.

The Nikkei 225 will tumble 40 percent to 9,000 by year-end
as a sales-tax increase in April and a slowdown in emerging
markets cause an unexpected decline in corporate earnings, Myojo
Asset Management Co. said.

Profit for Nikkei 225 companies will fall about 20 percent
in the 12 months ending March 2015 as gains in taxes and living
costs squeeze consumers, Makoto Kikuchi, Tokyo-based chief
executive officer at the hedge fund, said in an interview. Every
other firm surveyed by Bloomberg predicts a rally. A
deceleration in emerging economies as the Fed reduces stimulus
will also weigh on shares, Kikuchi said.

Exporters Drop

Futures on the Standard & Poor’s 500 Index sank less than
0.1 percent. The U.S. equity measure rose 1.1 percent yesterday
erasing this week’s loss, as earnings topped estimates at
companies from Facebook Inc. to PulteGroup Inc. and consumer
spending climbed. The index had lost 1 percent the previous day
as the Fed decided to cut monthly bond purchases by $10 billion.